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JPMorgan to Retain Dimon as CEO - Analyst Blog

As per a
Bloomberg
report, the board of directors at
JPMorgan Chase & Co.
(
JPM
) has shown its solidarity toward the current chairman and CEO
Jamie Dimon to continue with his dual responsibility. It was
widely speculated that Dimon would be asked to step down
following his failure to supervise the Chief Investment Office
(CIO) that led to the trading debacle.

Dimon's pay has already been slashed by 19% to $18.7 million from
$23 million in 2011. The compensation package includes $1.5
million in salary, stock awards worth $12 million and options of
nearly $5 million. It is to be noted that most of the pay cut
came from a reduction in the incentive compensation, which takes
3 years until it is fully vested.

The pay cut stemmed from the $6.2 billion trading loss the
company incurred on account of the risky trading activities now
dubbed as the London Whale trading loss. Dimon has piloted
JPMorgan as president and CEO since Dec 31, 2005. He became the
chairman in the subsequent year.

However, top 3 executives at JPMorgan have been awarded
compensations higher than Dimon. Mary Erdoes, Daniel Pinto and
Matthew Zames received higher compensations than the CEO for
2012. Zames and Pinto, who helped clear the trading mess, were
paid $17 million each.

Erodes, who is the CEO of the asset management division, netted
$15 million as total remuneration. Zames holds the office of
co-chief operating officer whereas Pinto is the co-CEO of the
corporate & investment bank along with Mike Cavanagh.

In addition, JPMorgan has retrieved nearly $100 million from the
managers responsible for last year's trading loss.

Though Dimon faced a pay slash, he is still at the helm of
affairs at JPMorgan, reflecting his tenacity. Moreover, under
Dimon the bank has performed impressively and has been reporting
profits for 3 successive years. Though the trading debacle
remains a blot on Dimon's career, we believe that he is capable
of running the affairs smoothly at JPMorgan. The board has
displayed its confidence by allowing him to continue as the CEO.

JPMorgan currently retains a Zacks Rank #2 (Buy). Other stocks
that are also performing well and can be considered for
investment include
Citigroup Inc.
(
C
),
Fifth Third Bancorp
(
FITB
) and
BankUnited, Inc.
(
BKU
). These carry a Zacks Rank #2.

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